Suppose 1M people are afflicted with a life-altering condition for which there is no cure. A drug company discovers a cure that requires one pill/day for 10 days. The cost of ingredients, production, packaging, distribution is $1/pill. However, when factoring in the expense of years of research (read scientist, lab workers, overhead….) and testing, the full cost of this miracle drug is $6/pill. In addition, overhead expenses continue while waiting for FDA approval.
What if the number of afflicted are only 10K or only one pill – once – is needed. The cost is still the same, but the selling price would have to be higher to amortize the costs. These scenarios cover costs of a successful drug development – but research into drugs that did not test out are added costs.
How much should the drug sell for? Cost plus government-set profit? Free – the government (taxpayers) will reimburse the company for the cost? Whatever the market will bear? If the owners/stockholders are government restricted in setting a price that will turn a profit, where’s the incentive to develop life-saving drugs in the first place? Capitalistic nations, lead the world in creating new products, concepts and procedures.
Chuck Klein, Columnist, https://AFNN.US
https://chuckklein.com
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